The market had a volatile session on September 25 after four days of correction. The benchmark indices settled flat with a positive bias with the Nifty forming a Doji candlestick pattern on the daily scale after taking support at the 19,600 levels. Hence, a rangebound trade is expected to continue unless the index gets a firm close above 19,800 for the higher side, while the decisive breaking of 19,600-19,500 zone can bring more correction in the market, experts said.
The Nifty50 rose 0.2 points to 19,674.50, and the BSE Sensex gained 15 points at 66,024, while the Nifty Midcap 100 index rose 0.66 percent and Smallcap 100 index 0.04 percent.
The market breadth was slightly in favour of bears as about 1,099 shares declined against 963 rising shares on the NSE.
On the sectoral front, the Nifty Bank index snapped a four-day losing streak, rising 154 points to 44,766, while the Nifty IT index corrected 258 points to 32,649 and formed a bearish candlestick pattern on the daily charts.
Stocks that fared better than broader markets included Punjab National Bank, RBL Bank, and MCX India. Punjab National Bank closed at the highest level since May 2019, rising 3.5 percent to Rs 80.23 on the NSE. The stock continued uptrend and formed long bullish candlestick pattern on the daily charts with above average volumes for second consecutive session, after recent consolidation.
RBL Bank shares climbed 2 percent to Rs 237.75 on Monday, in addition to 3 percent gains in previous session. It has seen a breakout of downward sloping resistance trendline adjoining highs of July 27 and August 30, with above average volumes for yet another session, indicating the possibility of further uptrend.
MCX India has also seen a breakout of falling resistance trendline adjoining highs high September 4 and September 21, with trading above all key moving averages. The stock rallied 6.66 percent to Rs 1,902 and formed strong bullish candlestick pattern on the daily timeframe, with robust volumes.
Here's what Ashish Kyal of Waves Strategy Advisors recommends investors should do with these stocks when the market resumes trading today:
Punjab National Bank (PNB)
Nifty PSU bank is the only sector which was able to hold its ground even when Nifty lost more than 500 points in matter of a week. Among PSU banks, Punjab National Bank is a stock which gave fantastic returns to the investors even in this choppy market.
As per technical perspective, PNB is in a continuous uptrend making higher high higher low formation. The nearest resistance for the price comes near Rs 85 levels. RSI (relative strength index) on the daily timeframe is in an overbought territory, so possibility of a dip or profit booking cannot be overruled.
On the other hand, support for the price comes at Rs 75 levels.
Investors who are currently holding this stock should hold it with a stop-loss of Rs 74, whereas someone who wants to make new positions in this stock should use any dip towards Rs 74-75 as a buying opportunity for the target of Rs 85 followed by Rs 90 levels.
RBL Bank is consolidating within a broader range of Rs 215-245. Any breach above Rs 245 is must for further bullish momentum to continue. RBL Bank is following classic Elliott wave pattern. As per this, Wave (2) got completed exactly near Rs 130 levels and since then stock is moving higher in form of wave (3). Currently wave 2 of (3) looks to be completed. Any breach above Rs 270 can confirm completion of the same on the downside as it will retrace 50 percent of the prior leg. After which, the rise will be in form of wave 3.
The stock is following 50 period exponential moving average line. Recently prices bounced back on the upside from it. One can continue to trade in the direction of ongoing trend as long as above-mentioned line is protected on the downside.
As per this, nearest support is near Rs 221 levels. Prices need to give a decisive break above Rs 245 for further buying to emerge with the target of Rs 270.
Mid bands (in the Bollinger band) continued to act as a support to prices and any dip towards the same i.e. towards Rs 1,755 levels can be used as a buying opportunity. Prices for the first time gave a close above upward tilted channel. However, we need follow up buying which can confirm breakout of the channel.
In short, overall outlook for MCX looks positive. Any daily close above Rs 1,875 is must for further bullish momentum to continue and then we can expect a move towards Rs 2,040. Rs 1,720 can act as a near term support.
Follow Ashish Kyal on Twitter - @kyalashish
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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